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21 December 2011
In Gunderson v Whitefox the Saskatchewan Queen's Bench upheld a lower court ruling that the registered owner of a Cessna P210N aircraft should, pursuant to the provisions of the Criminal Code, be entitled to receive possession of that aircraft, which had been seized by the police in the course of investigating a crime. The losing party with a competing interest was operating the aircraft at the time of the seizure. However, that was not the end of the matter. The orders made were interim in nature and the ownership dispute continued to a full trial, in which judgment was rendered on October 31 2011. The registered owner, Whitefox Air Inc, again prevailed.
In the litigation before the Saskatchewan Queen's Bench Whitefox produced a trust agreement demonstrating that it held the aircraft in trust for Whitefox Technologies USA Inc. The evidence at the hearing was that this trust agreement was valid at all relevant times. Whitefox also filed documentation showing that it had purchased the aircraft from Claude and Pamela Cage in May 2007 for US$600,000 and that payment was made by Whitefox to these vendors.
On the other hand, Chase Bryant (which had been associated with Robert Gunderson, the person from whom the aircraft was seized) argued that it was the true owner of the aircraft. Chase Bryant argued, supported mainly by Gunderson's evidence, that it had purchased the aircraft from Polymicron Technologies Inc through a conditional sales agreement in September 2008. The agreement in question was executed by Sharon Oates, Gunderson's sister.
Oates was not a shareholder or director of Chase Bryant. She agreed at the hearing that she had no documented authority to execute the conditional sales agreement on behalf of Chase Bryant. Gunderson, a former director of Chase Bryant, testified that Oates signed the conditional sales agreement because he was in the Netherlands at the time, and had no ready means of obtaining, signing and re-transmitting the document. Gunderson also gave contradictory evidence to the effect that he asked his mother (the president of Chase Bryant) to sign the conditional sales agreement. His mother did not testify at the hearing and no explanation was given for her failure to sign.
The purchase price set out in the conditional sales agreement was US$650,000. According to Oates, Chase Bryant sold a condo in Victoria, British Columbia in order to fund the purchase. No documents filed in court provide any evidence of such a sale:
"When asked why the documents were not provided in the hearing before the [court, Gunderson] claimed he had given them to the lawyer who acted on his behalf and the lawyer decided not to provide them to the court."
Gunderson sought to explain the purchase agreement filed by Whitefox in a manner consistent with his own position. He testified that while Whitefox advanced the purchase money, the amount was really owed to him for unpaid salary. He filed no documents supporting this allegation.
Also filed at the hearing was an aircraft security agreement pertaining to the aircraft, which was purportedly filed with the Federal Aviation Administration (FAA) (after the aircraft was seized) identifying Gunderson as a secured party with an interest in the aircraft. However, the Court noted that in his testimony, Gunderson failed to disclose that this document was rejected by the FAA because it was not executed by Whitefox.
Gunderson raised additional specious arguments to suggest Whitefox was not the true owner of the aircraft. These included a claim that Whitefox USA was an "undisclosed agent" for Polymicron, the company from which, according to Gunderson, Chase Bryant purchased the aircraft.
In the end, the court found that Gunderson was not a credible witness and expressed significant reservations about the documents that he filed in support of Chase Bryant's position. The court also referenced the fact that Gunderson had been the subject of an order from the Law Society of British Columbia in 1999 prohibiting him from, among other things, offering legal advice or holding himself out as a lawyer.
The court found that Chase Bryant had failed to establish that it was the owner of the aircraft and held that Whitefox USA is the owner of the aircraft, which is held in trust by Whitefox.
Chase Bryant's claim was dismissed and costs were awarded to the defendants.(1)
For further information on this topic please contact Carlos P Martins at Bersenas Jacobsen Chouest Thomson Blackburn LLP by telephone (+1 416 982 3800), fax (+1 416 982 3801) or email (email@example.com).
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